Starting an LLC: Where to begin?

Regarding registration, head to a notary rather than an attorney; they can walk you through the process (and honestly, they'll charge you a fortune anyway) and point you in the right direction...

Then there's the commercial court where you file your application, pay the fees via $6667 to a transit account, handle the court filing costs for advertisements and everything else, and then just wait and wait...

Besides, your next big task will be coming up with a business name, since all the famous ones are already taken. You can't use foreign names either, unless it's Latin or Ancient Greek...

And you really need to think long and hard about what activities you're registering the company for. Every single category costs money—for example, separating wholesale from retail, or import/export versus publishing used to cost about a hundred bucks per category back in the day...

So, adding ten more registrations could easily run you another $1,500...$667 which isn't much considering a business can technically engage in about a thousand different activities! You'll always find something missing, and the "fun" part is having to re-register every time you come up with a new idea...

Regardless, keep pushing forward. The future belongs to the entrepreneurs who want to prove themselves, not to us government bureaucrats...

Wishing you the best of luck...👍

just had a quick question for restlesssurfer97: regarding that de-registration thing, is it a massive headache to deal with, and what kind of damage are we talking about cost-wise? thanks in advance

young.but.dead said:Thanks, commodus👍

Does that $20,000 have to be sitting in cash in a bank account? I’ve heard stories about using inventory or equipment to cover that $6667 😕

Essentially, I’m wondering if that $20,000 is intended to guarantee liquidity or just basic solvency?

You can use assets—but you'll have to pay for a formal appraisal, which ends up being a waste of money in the end.

No, look, if you're struggling to scrape together $6.75 just to get an LLC registered, you might want to reconsider starting a business altogether. You won't get anywhere without some initial capital. While you can technically spend that money later on, it serves as your foundation; if your capital dips below half of that required amount, you’re legally obligated to call a shareholders' meeting where you, acting as both owner and director, will have to admit the business is failing. 😁

Re-registering everything costs a few hundred bucks and a fair amount of wasted time.

That’s solid advice from Vojkev...

Without having $20,000 in liquid cash...😕

We tried bringing equipment along, but you'd need to find an auditor who will certify $500 that a desk and chair are worth $20,000. Honestly, I think that's just a trap; it isn't worth the hassle when you'll actually need that money later on...

Updating your business registration takes up so much time with all the red tape involved in officially switching your focus. You have to file with the Secretary of State to update your records, deal with federal industry classifications, and if this is a new field for you, you'll have to figure out the specific NAICS code at the Census Bureau when you first set up the LLC...

Then there are the notary fees—you even have to have your corporate resolutions notarized, even if you're a solo owner...

So, every time you amend your registration, it's about $100 and two weeks of running errands. It really isn't worth it; you're better off just including everything in your initial filing and paying a little extra upfront...

Commodus said:Notaries have to certify everything; you absolutely need a notary to handle the meeting minutes, even if you happen to be the sole proprietor.

To clarify: the meeting minutes only require notarization when you are actually amending the articles of incorporation or the operating agreement.

Frankly, unless someone’s father happens to be the CEO of a major conglomerate like GE or JPMorgan who can hand them a steady stream of contracts on a silver platter and ensure they get paid on time, I wouldn't advise anyone to start a business without having at least $50,000$33 in reserve just to stay afloat during the initial grind.

Thanks for adding that, I guess I'll be reaching for my notebook again 😢 (dealing with those ownership changes...)

As for the advice, 👍 if you're working another job on the side, then thirty thousand in cash might be enough...

Commodus said:By the way, your next big hurdle is coming up with a name—since every decent one is already taken—and you can't use anything from a foreign language unless it’s Latin or Ancient Greek...

My ultimate life goal? Owning my own company. Since it’s been this dream of mine forever, I’ve actually already cooked up a name... though, it isn't from any existing language... I just completely made the word up myself...
So, here's the real question—can you actually register a business with a totally invented name...
Because that seems to be the secret sauce for so many massive brands... they just invent a brand-new word that sticks in your head and belongs solely to them...

Look, just having an idea is half the battle. Honestly, if you’ve got a bank account full of cash but absolutely zero vision, you’re actually in a worse spot than someone starting from scratch with nothing but a dream. I learned that the hard way when I took one of my own ideas and finally pulled the trigger to turn it into an LLC.

And yeah, following what everyone else is telling you—just go see a local notary. It’s pretty straightforward.
One thing though, and please take my word on this because I don't want you dealing with the headache I had: make sure you have your business name and your intended start date ready before you even walk through the door. You really need to double-check that name against the Secretary of State's database first. If someone in the US is already operating under that exact name and entity type, the registration is going to hit a wall immediately. Trust me, I spent way too much time spinning my wheels because I didn't check that simple detail beforehand.

That’s way too expensive for a suicide attempt. Honestly, just buying a bullet is cheaper.

I ran my own company from '93 to 2000. Man, I spent everything—my nerves, my cash, my time, endless sleepless nights, and hundreds of hours stuck in meetings and negotiations... I was even trying to cut deals with the President of EXIM Bank, but eventually, I just had to throw in the towel.
America is full of incredibly talented people, but it can be one of the absolute worst places on earth to try and run a business.

Friedhelm said:My life's goal is to start my own company. It’s been a dream of mine for years—I even have a name ready. But it isn't from any known language; I actually just made the word up entirely on my own....
So here's the question—can you actually register a company with a name like that?
That seems to be the secret behind so many massive brands... they invent a completely new word that sticks in your head and becomes synonymous with them and nothing else...

You just head down to the Secretary of State's office to check the business registry. See if anyone else has snagged it yet and if they'll even let it fly.
If they tell you the word doesn't exist in any dictionary—English, Latin, Ancient Greek, whatever—then you might as well just head home, grab a pen and paper, and try building an acronym instead. Just don't make it one of those ridiculous ones where the letters don't make sense, like "S.T.A.R." standing for "Super Tasty Apples Really"... the state won't buy that nonsense either...

As for the initial capital, you’ve got to put down at least $3.25 in cash, though you can offset the rest with assets and equity...

My accountant told me that "miscellaneous" expenses run about $2.00, which covers roughly ten different categories (each one being around $50), but that figure applies to the entire business group (like Retail, for example), plus things like running ads and other minor overhead...

Hey there,

I was wondering what the current legal requirement is for minimum capital when setting up an LLC here in the States? Also, how much of that can be contributed through assets versus just straight cash?

Oh, and one more thing... Let's say I pull the trigger and start a company... If that business stays totally dormant during its first year—meaning it’s basically just a shell on paper and doesn't actually do anything—are there still taxes or fees I have to cough up? If so, what kind of damage am I looking at?

Thanks,
T.

For an LLC, the initial capital must be denominated in US dollars. The minimum required capital is the equivalent of $2,700—calculated using the exchange rate set by the Federal Reserve on the day you file your incorporation paperwork with the Secretary of State. Each individual member's contribution must be at least $110 based on those same conversion standards. Naturally, this amount needs to be a multiple of $100. The sum of all individual contributions has to match the total stated capital. You can settle these contributions via cash or through the contribution of assets and property rights.
Before the company is officially registered, every member must pay in at least twenty-five percent of their cash contribution; if they are contributing assets instead, that full amount must be transferred upfront. Cash payments go directly into a temporary business account at a commercial bank. Totaling everything up—both the cash and the value of any physical assets—the amount cannot fall below $1,350.

Otherwise, you can find more details regarding LLC formation here:
http://www.sec.gov/edgar/searchedgar/companysearch.html

Alright... I’m still a little fuzzy on a few things here... Like, what’s the deal with this rule saying if you're putting it into assets or rights, it has to be contributed in its entirety right away?!? But fine, whatever...
So, based on this, the initial capital would be worth about $2,700...
I’m not sure if it's actually legal here in the States to just drop half the capital when you first incorporate the LLC and then take up to two years to cough up the other half?!
And one more thing—what’s the actual situation regarding taxes and fees for a company that's officially registered but isn't actually doing anything yet? Does anyone here know how that works? 🙂

Best, 🙂

Rockefeller said:Alright... I'm still a bit fuzzy on certain points... Like this idea that if you're contributing assets or rights, they have to be transferred in their entirety? But fine...
So, the minimum capital would be the equivalent of $2,700...
I'm not sure if it's possible here in the States to pay half the capital upfront when forming an LLC and then cover the rest within two years?!
And one more thing—what's the deal with fees or taxes for a company that’s officially registered but isn't actually doing anything yet? Anyone know how that works? 🙂

Best, 🙂

Don't bother! 🙂
Because you can't contribute assets or rights any other way than in full.

By the way, I wouldn't recommend using physical assets at all—you'd have to pay for a professional appraisal, which could run up to some serious $1.25, making the whole cost of starting the business unnecessarily high.

In most cases, it's most cost-effective to set up an LLC with the minimum required capital in cash. Later on, you can inject more funds through shareholder loans. It's a smart move because it allows you to "withdraw" that money later—essentially just paying yourself back the loan.

As for that last question, I couldn't tell you—you should probably check with a CPA.

If a company is officially registered as inactive, there's no requirement to file any reports with the IRS.
Once you actually kick off operations, however, you're required to register as a taxpayer with the IRS, US Customs and Border Protection, the Department of the Interior, Medicare and Medicaid, and so on.
After that, you have to keep filing those reports regardless of whether you're actively doing business or not.👋

So, this is the first time I’m hearing that you don't actually have to notify the IRS, US Customs and Border Protection, Medicare and Medicaid, or any of those other agencies until you actually start running operations—meaning you don't need to jump on them the second you register your LLC. But hey, maybe that's how it works!

Regarding the reports, that’s one thing... what I really want to know about are the overhead costs for a company that isn't even active yet. Do those even exist, and if they do, what are we talking about?
🙏

Look, you really ought to consider putting the company into dormancy... basically just freezing it in place so you aren't stuck paying any fees or taxes while things are quiet.
As far as the assets go, you could always list them as part of your initial capital investment and then gradually write down their value over time... which eventually leads to a reduction of that base capital😉
But if I’m being honest, I’d strongly suggest keeping a decent chunk of that as liquid cash. I mean, how else are you going to operate? If your bank account sits at a flat zero,😁 having some actual cash on hand shows a level of professionalism and seriousness that people expect when they're doing business with you...😉

To freeze a business entity, you have to file some specific paperwork and pay a fee, right?

Honestly, you’d be doing yourself a favor if you just kept the account active and actually paid up for the premium service—you know, like that gold-tier membership Nada Vidovic keeps bragging about! 😁